Assisting a client who was seeking further cover via convertible term policies

Client’s circumstances

The client originally took out six convertible term policies with a total sum assured of £1.2 million. This initial cover was structured by John Lamb Hill Oldridge into six separate policies of £200,000 each. They were now seeking a further £500,000 of cover.

Issues addressed

The insurer providing the convertible term contract offered not only a term length extension on conversion but also an RPI-linked (Retail Prices Index) increase to the sum assured since policy inception.

On £1.2 million of cover, and with inflation at its current level, this RPI-linking allowed the client to increase the total sum assured across the convertible term policies by a further £500,000, matching the additional cover required.

Tailored solution provided by John Lamb Hill Oldridge

We gave the client the choice between entering the market for a new £500,000 contract or converting their existing policies and adding an extra £500,000 of cover to their total protection.

The key feature of the latter is that it removed the need to go through either a medical or financial underwriting process.

Additionally, because the initial £1.2 million of cover was structured by us into six separate policies, the client also had the flexibility to choose to RPI-link some or all of the policies. This allowed them to match their additional liability, as well as choose to convert some policies to age 90 and others to guaranteed whole-of-life contracts.

The value this flexibility provided to our client cannot be underestimated when using life insurance as an Inheritance Tax planning solution. If you’re in a similar situation, please call John Lamb Hill Oldridge today for the very best advice.